Torex Gold expands El Limon

Torex Gold (TXG-T) has seen heavy trading and a boost in share price after finding more high-grade gold mineralization while defining and expanding its El Limon deposit in Mexico.

On Nov. 1, the day the drill results were announced, the company saw 4.9 million shares traded while its share price stayed flat at $1.52. By the following day, investors pushed the junior’s shares up 9.8% to $1.68 with 6.84 million shares changing hands.

Torex says the drill results suggest the deposit’s southern portion extends further east and west.

Notable hits clustered in the eastern end include: 18.01 grams gold per tonne over 8 metres, 5.08 grams over 23 metres and 6.38 grams over 11 metres.

While the results may not be the most spectacular to date, Torex says the ongoing drill program could potentially add significant ounces to its upcoming resource estimate and bring the junior closer to its goal of defining 5 million gold oz. in measured and indicated at the Morelos gold project.

“These excellent results from our largest deposit continue to give us the confidence that we will attain the five million ounces of gold [measured and indicated] in our new resource estimate,” Torex’s president and CEO Fred Stanford said in a press release. The estimate should be out by March 2012.

The company has delineated 3 million oz. gold at the Morelos project. Located 180 km southwest of Mexico City in the Morelos gold belt, the 290-sq.-km project hosts two main deposits: El Limon and Guajes.

Combined, the deposits contain a measured and indicated resource of 2.9 million oz. from 28.8 million tonnes at 3.20 grams gold, plus another 890,000 oz. in inferred from 8.6 million tonnes at 3.20 grams.

Stanford also said a hole to the southwest of El Limon, which cut 4 metres of 4.65 grams gold, supports the company’s geological theory that the mineralization “rings around” the intrusion and may continue south in the direction of the Balsas River.

The company first hinted at this possibility when it released encouraging drill results from the Guajes West deposit in mid-October. “We are seeing, for the first time, results that suggest the possible extension of the Guajes West deposit to the southwest, in the direction of the Balsas River,” Stanford said in an Oct. 11 press release. “This adds to the evidence that the mineralization continues along the main intrusion.”